Glossary

A

Absorption

Absorption

The amount of inventory or units of a specific commercial property type that become occupied during a specified time period (usually a year) in a given market, typically reported as the absorption rate.

Active income

Active income

Income from salary, wages, tips, commissions, and activities in which the taxpayer materially participates. Also see passive income.

Adjusted basis

Adjusted basis

The original cost basis of a property plus capital improvements, less total accumulated cost recovery deductions, and partial sales taken during the holding period.

Amortization

Amortization

The repayment of loan principal through equal payments over a designated period of time consisting of both principal and interest.

Annual debt service (ADS)

Annual debt service (ADS)

The total amount of principal and interest to be paid each year to satisfy the obligations of a loan contract.

Annual percentage rate (APR)

Annual percentage rate (APR)

The true annual interest rate payable for a loan in one year taking account of all charges made to the borrower, including compound interest, discount points, commitment fees, mortgage insurance premiums. It also takes into account the time at which the principal is repaid (especially when payments of principal are made in installments throughout the year, but interest is charged at the beginning of the year), but not the actual expenses incurred by the lender in making the loan and recharged to the borrower. (Encyclopedia of Real Estate Terms 2nd Edition, Damien Abbott)

Annuity

Annuity

Regular fixed payments or receipts over a designated period of time.

Appreciation

Appreciation

An investment’s increase in value over time.

Assessed value

Assessed value

The value of real property established by the tax assessor for the purpose of levying real estate taxes.

Average annual effective rate

Average annual effective rate

The average annual effective rent divided by the square footage.

Average annual effective rent

Average annual effective rent

The tenant’s total effective rent divided by the lease term.

Averaging method

Averaging method

A simple technique used to forecast next period's/year's vacancy rate by averaging previous years' vacancy rates; especially effective where vacancy rates have remained relatively flat or show little variability over time.

B

Balloon payment

Balloon payment

The final payment of the balance due on a partially amortized loan.

Base (in lease terminology)

Base (in lease terminology)

A face, quoted, dollar amount representing the rate or rent in dollars per square foot per year and typically referred to as the base rate.

Base rent

Base rent

The minimum rent due to the landlord. Typically, it is a fixed amount. This is a face, quoted, contract amount of periodic rent. The annual base rate is the amount upon which escalations are calculated.

Basic employment

Basic employment

Employment that is considered to be export-oriented or export-driven, associated with activities that generate income from the sales of products and services in markets outside the local economy.

Basis

Basis

The total amount paid for a property, including equity capital and the amount of debt incurred.

Before-tax investment value

Before-tax investment value

The sum of the present values of the mortgagor and mortgagee of property.

Break-even point

Break-even point

The stage at which an investment produces an income that is just sufficient to cover recurring expenditure. For an investment in real property, the point at which gross income is equal to normal operating expenses, including debt service (the stage at which the next cash flow becomes positive). Also known as the default point. (Encyclopedia of Real Estate Terms 2nd Edition, Damien Abbott)

Breakpoint

Breakpoint

The sales threshold over which percentage rent is due. It is calculated by dividing the annual base rent by the negotiated percentage applied to the tenant’s gross sales.

C

CAM

CAM

Charges paid by the tenant for the upkeep of areas designated for use and benefit of all tenants. CAM charges are common in shopping centers. Tenants are charged for parking lot maintenance, snow removal, and utilities.

CAM cap

CAM cap

The maximum amount for which the tenant pays its share of common area maintenance costs. The owner pays for any CAM expenses exceeding that amount.

Capital expenditures

Capital expenditures

Property improvements that cannot be expensed as a current operating expense for tax purposes. Examples include a new roof, tenant improvements, or a parking lot—such items are added to the basis of the property and then can be depreciated over the holding period. Distinguished from cash outflows for expense items such as new paint or plumbing repairs (operating expenses) that can be expensed in the year they occur. Also see operating expenses.

Capital gain

Capital gain

Taxable income derived from the sale of a capital asset. It is equal to the sales price less the cost of sale, adjusted basis, suspended losses, excess cost recovery, and recapture of straight-line cost recovery.

Capital tax

Capital tax

Any tax on a change in capital value (including capital gains tax, estate tax, or inheritance tax); as distinguished from a tax on income. (Encyclopedia of Real Estate Terms 2nd Edition, Damien Abbott)

Capitalization rate

Capitalization rate

A percentage that relates the value of an income-producing property to its future income, expressed as net operating income divided by purchase price. Also referred to as cap rate.

Cash flow

Cash flow

The net cash received in any period, taking into account net operating income, debt service, capital expenses, loan proceeds, sale revenues, and any other sources and uses of cash.

Cash flow after tax/es (CFAT)

Cash flow after tax/es (CFAT)

For properties, it is the result of first calculating the net operating income, less mortgage and construction loan interest, less cost recovery for improvements and personal property, less amortization of loan points and leasing commissions to arrive at real estate taxable income. Next, real estate taxable income is multiplied by the applicable marginal tax rate to result in the tax liability (savings). Then, from the net operating income, annual debt service is subtracted to equal the cash flow before taxes (CFBT). Finally, the cash flow after taxes (CFAT) is calculated from the CFBT, less the tax liability (savings), plus investment tax credit. The Cash Flow Analysis Worksheet can be used to calculate a property’s gross operating income, net operating income, real estate taxable income and tax liability or (savings), CFBT, and CFAT.

Cash flow before tax/es (CFBT)

Cash flow before tax/es (CFBT)

For properties, it is the result of calculating the effective rental income, plus other income not affected by vacancy, less total operating expenses, less annual debt service, funded reserves, leasing commissions, and capital additions. The Annual Property Operating Data form can be used to calculate a property’s effective rental income, gross operating income, total operating expenses, net operating income, and cash flow before taxes.

Cash proceeds from sale

Cash proceeds from sale

The sales price less sales costs, mortgage balance, and tax liability on sale. Also known as sales proceeds after tax.

Cash-on-cash rate

Cash-on-cash rate

A return measure that is calculated as cash flow before taxes divided by the initial equity investment.

Commercial real estate

Commercial real estate

Any multifamily residential, office, industrial, or retail property that can be bought or sold in a real estate market.

Common area

Common area

For lease purposes, the areas of a building (and its site) that are available for the non- exclusive use of all its tenants, such as lobbies, corridors, and parking lots. (Real Estate Information Standards)

Common area maintenance (CAM)

Common area maintenance (CAM)

Charges paid by the tenant for the upkeep of areas designated for use and benefit of all tenants. CAM charges are common in shopping centers. Tenants are charged for parking lot maintenance, snow removal, and utilities.

Compound interest

Compound interest

Interest computed on the original principal and accumulated interest.

Compounding

Compounding

A type of calculation in which interest earned is reinvested and earns additional interest.

Contract rent

Contract rent

The total rental obligation, expressed in dollars, as specified in a lease. Also known as base rent. (Real Estate Information Standards)

Cost

Cost

The actual dollar amount paid for a property or the amount needed to build or improve it at a specified time in the future.

Cost approach

Cost approach

A method of determining the market value of a property by evaluating the costs of creating a property exactly like the subject.

Cost approach improvement value

Cost approach improvement value

The current cost to construct a reproduction of, or replacement for, the existing structure less an estimate for accrued depreciation from all causes. [Appraisal Institute]

Cost recovery

Cost recovery

An annual deduction based on the class life of an asset.

Cost recovery recapture

Cost recovery recapture

According to the Taxpayer Relief Act of 1997, for properties sold after May 6, 1997, a noncorporate taxpayer will have to recapture, or pay taxes on, any straight-line cost recovery taken during the holding period, to the extent there is any gain.

D

Data

Data

Refers to information collected and presented in a form that facilitates processing and analysis.

Debt-coverage ratio (DCR)

Debt-coverage ratio (DCR)

Ratio of net operating income to annual debt service. Expressed as net operating income divided by annual debt service.

Demand

Demand

The volume or quantity of a product or service purchased, or willing to be purchased, in relation to price.

Demand factors

Demand factors

Elements or forces that influence the demand for goods and services in a given market area.

Demographics

Demographics

Characteristics of human populations as defined by population size and density of regions, population growth rates, migration, vital statistics, and their effect on socio-economic conditions.

Depreciation

Depreciation

The loss of utility and value of a property.

Differential cash flow

Differential cash flow

The difference that results when the cash flows from one alternative are subtracted from the cash flows from another alternative.

Discount rate

Discount rate

The percentage rate at which money or cash flows are discounted. The discount rate reflects both the market risk-free rate of interest and a risk premium. Also see opportunity cost.

Discounted effective rent

Discounted effective rent

The cash flows over the term of the lease, discounted to the present value.

Discounting

Discounting

The process of reducing the value of money received in the future to reflect the opportunity cost of waiting to receive the money.

Diversification

Diversification

A method of reducing risk by investing in unrelated (uncorrelated) assets.

Due diligence

Due diligence

The process of examining a property, related documents, and procedures conducted by or for the potential lender or purchaser to reduce risk. Applying a consistent standard of inspection and investigation one can determine if the actual conditions do or do not reflect the information as represented.

E

Economic base

Economic base

Those economic activities or sectors in a local or regional economy that account for a certain share of the area's income that is generated from exports of goods and services.

Economic base analysis

Economic base analysis

Inquiries that focus on the extent to which changes in basic employment (export-oriented activities and associated wage-income) affect the economic, employment, and population growth of a local or regional economy.

Economic base multiplier

Economic base multiplier

A measure that provides a rough estimate of how changes in basic employment will affect total employment in a given region (all other things being equal); defined as the ratio of total employment to basic employment.

Economic characteristics

Economic characteristics

Attributes of the workforce, including production and employment activities.

Economic obsolescence

Economic obsolescence

The reduction in a property's value due to external circumstances such as legislation or changes in nearby property use.

Economic sectors

Economic sectors

Branches or divisions of a local or regional economy in which particular activities take place.

Effective

Effective

An amount after a base amount has been adjusted for concessions, allowances, and costs.

Efficiency

Efficiency

A measure of the capacity or effectiveness of space to produce the desired results with a minimum expenditure of time, money, energy, and materials.

Efficiency percentage

Efficiency percentage

The relationship of useable area to rentable area on a given property. Also see add-on factor, load factor, and rentable-to-useable ratio. Formula:Efficiency % = Useable square feet Rentable square feet

Employment ratios

Employment ratios

The percentage of total employees (at the firm or industry level) that are office space users.

Environmental conditions

Environmental conditions

Features or state of the physical environment and the surroundings, factors, or forces which influence or modify that environment.

Environmental hazards

Environmental hazards

Any physical or natural condition or event which possesses a risk to humans.

Environmental impacts

Environmental impacts

The repercussions of an activity or specific land use on the physical/social environment as a consequence of emissions, waste disposal, water and power usage, etc.

Equity lease

Equity lease

A type of joint venture arrangement in which an owner enters into a contract with a user who agrees to occupy a space and pay rent as a tenant, but at the same time, receives a share of the ownership benefits such as periodic cash flows, interest and cost recovery deductions, and perhaps a share of the sales proceeds.

Equity yield rate

Equity yield rate

The return on the portion of an investment financed by equity capital.

Exchange

Exchange

Under Section 1031 of the Internal Revenue Code, like-kind property used in a trade or business or held as an investment can be exchanged tax-deferred. Under a fully qualified Section 1031 exchange, real estate is traded for other like-kind property. All capital gains taxes are deferred until the newly acquired real estate is disposed of in a taxable transaction. The underlying philosophy behind the deferral of capital gains taxes is that taxation should not occur as long as the original investment remains intact in the form of (like-kind) real estate (like-kind refers to real property as such, rather than the quality or quantity of property).

Expected value (EV)

Expected value (EV)

The sum of the weighted averages of all possible outcomes of a probability distribution.Probability distribution is the collection of all possible outcomes for an event and their corresponding probabilities of occurrence. The probabilities of occurrence for each possible outcome are used as the weights. The sum of each possible value multiplied by its probability of occurrence equals the EV of the outcome. EVs can be calculated for any type of outcome the investor chooses to analyze: net operating incomes, after-tax cash flows, and rates of return (IRRs). An example of calculating the EV of the IRR for an investment follows.

External economies

External economies

Savings or cost-cutting allowances realized by firms or industries within a given city that are primarily due to the advantages of sharing production inputs, information, and infrastructure and/or possibly linked to a city's comparative advantage to support a given activity.

External obsolescence

External obsolescence

A form or source of accrued depreciation considered in the cost approach to market value. The loss of value is because of external forces and change. For example, a new mall causes traffic and congestion, negatively affecting residential property values nearby, or a motel is no longer viable because a highway is rerouted, or another example would be depressed market conditions.

F

Fair value of an asset (or liability)

Fair value of an asset (or liability)

The amount at which the asset (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. (Real Estate Information Standards)

Feasibility analysis

Feasibility analysis

The process of evaluating a proposed project to determine if that project will satisfy the objectives set forth by the agents involved (including owners, investors, developers, and lessees).

Financial leverage

Financial leverage

The use of borrowed funds to acquire an investment.

Financial risk

Financial risk

The possible change in an investment's ability to return principal and income.

Fixed expenses

Fixed expenses

Costs that do not change with a building's occupancy rate. They include property taxes, insurance, and some forms of building maintenance.

Fixed lease

Fixed lease

A lease in which the lessee pays a fixed rental amount for the duration of the lease.

Forecast

Forecast

An estimate or prediction of a future condition or outcome.

Forecast period

Forecast period

An upcoming time period of interest in which a forecast is to be made.

Formal (or geographic) data

Formal (or geographic) data

Information/data collected and presented by formal region. Also see formal region.

Formal region

Formal region

A region identified by political jurisdiction or on the basis of the presence or absence of one or more distinguishing features or characteristics.

Free rent

Free rent

See rent concessions.

Fully amortized mortgage loan

Fully amortized mortgage loan

A method of loan amortization in which equal periodic payments completely repay the loan.

Functional components

Functional components

Factors which determine how a location or site functions.

Functional data

Functional data

Information/data collected and presented by functional region. Also see functional region.

Functional obsolescence

Functional obsolescence

A form or source of accrued depreciation considered in the cost approach to market value.The reduced capacity of a property or improvements to perform their intended functions due to new technology, poor design, or changes in market standards.

Future value (FV)

Future value (FV)

The amount to which money grows over a designated period of time at a specified rate of interest.

G

Gap analysis

Gap analysis

An evaluation of the difference in the demand and supply of space (measured in terms of square footage) for a particular type of commercial property in a given market area where gaps are expressed as the amount of square footage demanded less the amount of square footage available in a given time period. Note that if demand exceeds supply, the gap will be positive. A positive gap indicates that potential opportunities exist for successful commercial real estate transactions. However, transactions might be avoided when supply exceeds demand (or when a negative gap occurs), as there is an oversupply of available space in the market.

Globalization

Globalization

The condition of being or becoming globalized. A concept used to recognize cross jurisdictional interdependencies and the continuing integration of local, regional, and national economies which now form a larger economic and production system that is worldwide in scope and application; a trend that has greatly affected local economic change and real estate values.

Government incentives

Government incentives

Concession given or measures taken by local or regional government to attract firms or investment dollars to a given locality for the purposes of promoting economic growth and encouraging development.

Gross area

Gross area

The entire floor area of a building or the total square footage of a floor.

Gross leasable area (GLA)

Gross leasable area (GLA)

The total floor area designed for tenant occupancy and exclusive use, including basements, mezzanines, and upper floors, and it is measured from the center line of joint partitions and from outside wall faces. GLA is that area on which tenants pay rent; it is the area that produces income.

Gross lease

Gross lease

A lease in which all expenses associated with owning and operating the property are paid by the landlord. Also see net lease.

Gross operating income

Gross operating income

The total income generated by the operations of a property before payment of operating expenses. It is calculated from potential rental income, plus other income affected by vacancy, less vacancy and credit losses, plus other income not affected by vacancy. The Annual Property Operating Data form or the Cash Flow Analysis Worksheet can be used to calculate a property's gross operating income.

Gross rent multiplier (GRM)

Gross rent multiplier (GRM)

A method investors may use to determine market value. This method calculates the market value of a property by using the gross rents an investor anticipates the property will produce at end of year 1 multiplied by a given factor (known as the gross rent multiplier extracted from the marketplace).

Ground lease

Ground lease

A lease of the land only. Usually the land is leased for a relatively long period of time to a tenant that constructs a building on the property. A land lease separates ownership of the land from ownership of buildings and improvements constructed on the land.

H

Hedging

Hedging

Protecting oneself against negative outcomes.

Highest and best use

Highest and best use

The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. [Appraisal Institute]

Highest and best use (financial) analysis

Highest and best use (financial) analysis

A determination of the highest and best use of one or more sites (either vacant or as though vacant) or properties as improved by examining the profitability of all possible use scenarios (including renovation, rehabilitation, demolition, and replacement).

Household

Household

A housing unit or residence at a given location that is occupied by one or more persons (that is, a social unit comprised of one or more individuals living together in the same dwelling or place).

Household population

Household population

The total number of households in a given geographic market or submarket as defined by specific demographic and socio-economic characteristics.

Housing demand

Housing demand

The total number of housing units demanded in a given market, defined as occupied household units divided by one minus the vacancy allowance for that market (where demand is affected by the rate at which new households are being added to the market,allowing for a normal level of vacancy).

I

Income capitalization approach

Income capitalization approach

A method to estimate the value of an income-producing property by converting net operating income into a value. The cap rate is divided into the net operating income to obtain the estimated value. Value = net operating income ˜ capitalization rate

Index lease

Index lease

A lease in which the rental amount adjusts accordingly to changes and/or movements in a price index, commonly the consumer price index.

Industrial property

Industrial property

Commercial properties that are used for the purposes of production, manufacturing, or distribution.

Industrial service area

Industrial service area

The geographic area within a market that contains either an acceptable number of employees (and meets necessary labor requirements), or the necessary service and resources needed to support a given industrial activity or facility.

Initial investment

Initial investment

The outlay of cash needed to acquire an investment.

Intangible characteristics

Intangible characteristics

Attributes that are not directly measurable or quantifiable, and therefore must be expressed in a qualitative or abstract manner.

Interest-only loan

Interest-only loan

A method of loan amortization in which interest is paid periodically over the term of the loan and the entire original loan amount is paid at maturity.

Internal growth

Internal growth

The rate at which a base population or the number of new households is changing due to natural increase (births less deaths) and time (the aging and maturation of that population),as children are born, grow up, and form families and households of their own.

Internal rate of return (IRR)

Internal rate of return (IRR)

The percentage rate earned on each dollar that remains in an investment each year. The IRR of an investment is the discount rate at which the sum of the present value of future cash flows equals the initial capital investment.

Internal rate of return method

Internal rate of return method

A comparison method that calculates the internal rate of return of the differential cash flow between any two investment alternatives, then compares that rate with the user's opportunity cost. Also see internal rate of return.

Inventory

Inventory

The supply or stock of a given commodity or a listing thereof.

Investing

Investing

Limiting current consumption in favor of future consumption.

Investment value

Investment value

The value to a specific investor, based on that investor's requirements, tax rate, or financing.

K

Key federal laws

Key federal laws

With respect to the handling of hazardous materials, they are important laws or statutes enacted to enforce the responsible handling of materials to minimize the danger to human beings and/or the environment.

L

Labor pool

Labor pool

A body or core group of workers (employed and employable) that make up the local labor force.

Land sale-leaseback

Land sale-leaseback

The same concept as a sale-leaseback, but only the land is sold and leased back using a ground lease.

Landlord

Landlord

The lessor or owner of the leased property.

Landlord-paid tenant improvements (LPTI)

Landlord-paid tenant improvements (LPTI)

The total cost (outlay) of necessary tenant improvements paid by the landlord netted against any contribution made by the tenant.

Lease

Lease

A contract that creates the relationship of landlord and tenant. A contractually binding agreement that grants a right to exclusive possession or use of property, usually in return for a periodic payment called rent. (Encyclopedia of Real Estate Terms 2nd Edition, Damien Abbott)

Lease buyout

Lease buyout

The process by which a landlord, tenant, or third party pays to extinguish the tenant's remaining lease obligation and rights under its existing lease agreement.

Lease terminology

Lease terminology

Terms commonly used in reference to a lease.

Leased fee

Leased fee

In exchange for permitting a tenant to use the property, the owner/lessor has the right to receive rental income and the right to repossess the property upon termination of the lease.

Leased fee interest

Leased fee interest

The value (to the owner) of the rental payments plus the value of the property at the end of the lease term (reversionary interest).

Leasehold estate

Leasehold estate

In exchange for rent, the tenant has the right to occupy and use the property for the duration of the lease.

Leasehold interest

Leasehold interest

The value (to the tenant) of the lease. The value of the leasehold interest is determined by present value of the difference between market rent and the contract rent.

Leasing

Leasing

A means of obtaining the physical and partial economic use of a property for a specified period without obtaining an ownership interest.

Lessee

Lessee

The person renting or leasing the property. Also known as a tenant.

Lessor

Lessor

The person who rents or leases a property to another. Also known as a landlord.

Leverage

Leverage

The use of borrowed funds to finance a portion of the cost of an investment.

Liquidation value

Liquidation value

The likely price that a property would bring in a forced sale (foreclosure or tax sale). Used when a sale must occur with limited exposure time to the market or with restrictive conditions of sale.

Liquidity

Liquidity

The ability to convert an investment into cash quickly without loss of principal.

Load factor

Load factor

The ratio of rentable area to useable area. The load factor is a gauge by which a user can evaluate different sites with comparable rents. It is also known as the add-on factor.Formula:Load factor = Rentable square feet Useable square feet

Loan balance

Loan balance

The amount of money remaining to be paid on an amortizing loan at a given time.

Loan or mortgage value

Loan or mortgage value

That portion of the value of real property recognized by the lender when used to secure a loan.

Loan point

Loan point

A charge prepaid by the borrower upon the origination of a loan. One point equals one percent of the loan amount.

Loan-to-value ratio (L/V)

Loan-to-value ratio (L/V)

The amount of money borrowed in relation to the total market value of a property.Expressed as the loan amount divided by the property value.

M

Macro-economy

Macro-economy

Generally used in reference to matters of economy or economic factors and forces portrayed or operating at the macro-level (as opposed to micro-level), used synonymously with national economy.

Management

Management

The ability to monitor the performance of an investment and make changes as needed.

Managing risk

Managing risk

The steps taken by an investor or manager to control or reduce investment risk.

Market analysis

Market analysis

The process of examining market supply and demand conditions, demographic characteristics, and opportunities; identifying alternative locations/sites that meet specific objectives or satisfy various criteria; and assessing the financial feasibility of those locations/sites to facilitate decision making regarding the commercial potential or suitability of various locations/sites to support a given activity or use.

Market area

Market area

A geographical area in which supply and demand operate to influence the course of industrial and commercial activities, for example, a Metropolitan Statistical Area (MSA).

Market data

Market data

Information/data collected and displayed for a given market or by market area.

Market data approach

Market data approach

A method of determining the property's value by analyzing recent sales or rental prices of comparable properties.

Market dynamics

Market dynamics

In reference to changing market conditions and the underlying processes responsible for creating change and defining/redefining interrelationships amongst components in an economic system (consider the change in price levels of a given commodity as an outcome of the forces and interplay of supply and demand).

Market feasibility

Market feasibility

Pertaining to the evaluation or selection of a site or an analysis of a site's highest and best use. Also see feasibility analysis.

Market gap

Market gap

The demand for space minus the supply of space for a specific type of commercial property in a given real estate market. Also see general market area gap analysis.

Market opportunities

Market opportunities

Advantageous circumstances in a market which facilitate a given action or outcome that is generally viewed as favorable from a money-making standpoint.

Market pricing

Market pricing

The pricing of commodities (including rental rates of various types of commercial properties) as determined by the forces and factors of influence operating in a market.

Market risk

Market risk

The possibility that downward market trends will reduce an investment's market value.

Market share

Market share

Refers to the percentage of total sales in a retail category that each competing outlet is expected to capture based on current patterns and trends in the market.

Market strategy

Market strategy

A course of action defined with respect to a particular real estate market phase. For example, consider the market strategy of avoiding real estate transactions when there is an oversupply of space available in the market.

Market value

Market value

The most probable price that a property would bring in a competitive and open market under fair sale conditions. Market value also refers to an estimate of this price.

Marketability

Marketability

The ability to sell or lease a property quickly. Marketability deals with the appeal and demand for a property, good, or service.

Mean

Mean

A measure of central tendency (for a distribution of values) defined as the average value of a variable in a sample and calculated by adding together all the values observed in a data set and dividing by the number of values observed.

Median

Median

Defined as the middle value of a data set (or sample) when the values are arranged in order (by size ranking, in ascending or descending order). Note that for an odd number of values in an ordered data set, the median is identified as the value which divides the data set into two data sets of equal size on each side of the median or middle value. For an even number of values arranged in order, the median is found by simply calculating the value mid-way between the two middle values. Note that the position of the median value of an ordered data set containing n observations may be found by using the formula: position of the median = n/2 + 1/2.

Metropolitan Statistical Area (MSA)

Metropolitan Statistical Area (MSA)

Generally, the area in and around a major city. The Office of Management and Budget (OMB) defines an MSA as having one of the following characteristics: a city with a population of at least 50,000, or an urbanized area with a population of at least 50,000 with a total metropolitan population of 100,000.

Mid-month convention

Mid-month convention

A requirement of the Tax Reform Act of 1984 that taxpayers use the 15th of the month to establish the date of acquisition and date of disposition when calculating cost recovery deductions. This act applies to real estate placed in service after June 22, 1984 (with the exception of low-income housing).

Minimum requirement

Minimum requirement

The observed minimum proportion of employment in a given economic sector for communities within a given size range, assumed to be that employment/activity level that is necessary to serve the needs of a community that falls within a predetermined size range (the minimum amount of nonbasic employment necessary to support a typical mix of industry for a population base of a given size range).

Minimum requirements method

Minimum requirements method

A method for estimating a community's economic base multiplier using basic employment estimates that are obtained by comparing employment levels by economic sector to the identified minimum requirement.

Moving allowance

Moving allowance

A specified dollar amount paid by the owner to cover,in part or in whole, tenant moving expenses. Also known as owner's moving expense.

Moving expenses

Moving expenses

The cost incurred by the tenant to move into the new space. The landlord may pay a portion or all, depending on what is negotiated in the lease. Also see moving allowance.

Multifamily housing

Multifamily housing

Housing units that accommodate more than one family or household.

Multiple-use office space

Multiple-use office space

Office space that can be used for a variety of purposes; sometimes referred to as generic office space.

N

Negative leverage

Negative leverage

Borrowed funds are invested at a rate of return lower than the cost of funds to the borrower.

Neighborhood center

Neighborhood center

This center is designed to provide convenience shopping for the day-to-day needs of consumers in the immediate neighborhood. According to ICSC's SCORE publication, a supermarket anchors half of these centers, while about a third have a drugstore anchor.Stores offering pharmaceuticals and health-related products, sundries, snacks and personal services, support these anchors. A neighborhood center is usually configured as a straight line strip with no enclosed walkway or mall area, although a canopy may connect the storefronts.

Net lease

Net lease

A lease in which the tenant pays, in addition to rent, all operating expenses such as real estate taxes, insurance premiums, and maintenance costs. Also see gross lease.

Net operating income (NOI)

Net operating income (NOI)

The potential rental income plus other income, less vacancy, credit losses, and operating expenses.

Net present value (NPV)

Net present value (NPV)

The sum of all future cash flows discounted to present value and netted against the initial investment.

Neutral leverage

Neutral leverage

An investment situation in which the cost of borrowed funds is exactly equal to the yield provided by the investment.

O

Obsolescence

Obsolescence

In reference to the inadequacy, disuse, outdated, or non-functionality of facilities, infrastructure, products, or production technologies due to effects of time, changing market conditions, or decay (a factor considered in depreciation to cover the decline in value of fixed assets due to the invention and adoption of new production technologies, or changing consumer demand).

Occupancy cost

Occupancy cost

The actual dollars paid out by the tenant to occupy the space. It can be expressed in either pre-tax or after-tax dollars.

Office

Office

Low-rise - Fewer than seven stories high above ground level. Mid-rise - Between seven and twenty-five stories above ground level High-rise - Higher than twenty-five stories above ground level. [BOMA].

Office property

Office property

commercial property type used to maintain or occupy professional or business offices. Such properties typically house management and staff operations. The term office can refer to whole buildings, floors, parts of floors, and office parks. Office space that can be used for a variety of purposes is sometimes referred to as generic office space. Office properties may be classified as Class A, B, or C. Class A properties are the most functionally modern.Properties Classed B and C in the same market typically command lower rents because they are older and in need of modernization. They may not be as efficient or desirable as Class A properties because their design or condition causes functional problems.

Operating expense stop

Operating expense stop

A negotiable amount at which the owner's contribution to operating expenses stops. It also can be stated as the amount above which the tenant is responsible for its pro rata share of operating expenses.

Operating expenses

Operating expenses

Cash outlays necessary to operate and maintain a property. Examples of operating expenses include real estate taxes, property insurance, property management and maintenance expenses, utilities, and legal or accounting expenses. Operating expenses do not include capital expenditures, debt service, or cost recovery.

Opportunity cost

Opportunity cost

The cost of selecting one alternative is the benefit foregone from the next best alternative. Also see discount rate.

Original basis

Original basis

The total amount paid for a property, including equity capital and the amount of debt incurred.

Outlet center

Outlet center

A retail property type usually located in rural or occasionally in tourist locations, outlet centers consist mostly of manufacturers' outlet stores selling their own brands at a discount.These centers are typically not anchored. A strip configuration is most common, although some are enclosed malls, and others can be arranged in a village cluster.

Overage rent

Overage rent

See percentage rent.

Oversupply

Oversupply

In reference to commercial real estate, oversupply is a stock or supply of a given commercial property type that is greater than that which can be cleared under prevailing prices levels and market conditions (for example, excess supply). Also, a phase of the real estate market cycle denoting that period of time in which commercial real estate markets become saturated with units due to overbuilding.

Owners moving expense

Owners moving expense

See moving allowance.

Owning

Owning

A means of obtaining the full economic use of a property for an unspecified period by obtaining an ownership interest.

P

Partially amortized mortgage loan

Partially amortized mortgage loan

The payments do not repay the loan over its term and thus a lump sum (balloon) is required to repay the loan.

Participation mortgage

Participation mortgage

A loan secured by real property, with a stated interest rate that also provides for a share to the lender in annual net cash flow, gain on sale, or proceeds from refinancing the property.(Real Estate Information Standards)

Passive income

Passive income

Income from rental activity, limited business interests, or other activities in which the investor does not materially participate.

Passive losses

Passive losses

Losses from the ownership of passive investments.

Payment (PMT)

Payment (PMT)

A periodic amount paid or received for two or more periods.

Percentage lease

Percentage lease

A lease in which the rent amount is based on a percentage of gross sales (monthly or annually) made by the tenant.

Percentage rent

Percentage rent

The additional rent (over a base amount) that is paid by tenants to owners on tenant sales over a specified dollar amount. It is frequently found in retail leases. Also known as overage rent.

Perfect market

Perfect market

A market in which the products are homogenous, there is complete information, and no buyers or sellers may influence the market.

Physical depreciation or deterioration

Physical depreciation or deterioration

A form or source of accrued depreciation considered in the cost approach to market value.The physical decay or deterioration of a property that may result from breakage, deferred maintenance, effects of age on construction material, and normal wear and tear. (Barron's Dictionary of Real Estate Terms)

Physical limitations

Physical limitations

Limitations imposed by the physical size, shape, or characteristics of a property or its level of development.

Pipeline information

Pipeline information

Information (substantiated and rumored) regarding new inventory that is in the process of being added to the market by a specified forecast period.

PMT

PMT

See payment.

Population growth

Population growth

The rate at which a given population base in a given geographic area is growing (positive or negative) in relation to the forces of internal growth, in-migration, and out-migration; a factor that is widely acknowledged as having the greatest impact on the demand for housing.

Population migration

Population migration

The movement and relocation of people from one place of residence to another in response to social and economic factors and forces; a long-term trend that can be expected to affect local economies and real estate values.

Portfolio income

Portfolio income

Income from interest, dividends, royalties, or the disposition of property held for investment.

Positive leverage

Positive leverage

Borrowed funds are invested at a rate of return higher than the cost of the funds to the borrower.

Potential rental income

Potential rental income

The total amount of rental income for a property if it were 100 percent occupied and rented at competitive market rates.

Present value (PV)

Present value (PV)

The sum of all future benefits or costs accruing to the owner of an asset when such benefits or costs are discounted to the present by an appropriate discount rate.

Present value method

Present value method

A comparison technique that compares the present values of the cash flows for any two real estate alternatives. The best user alternative is based on the lower present value amount. It is not the same as net present value.

Price

Price

The dollar amount that was offered, asked, or actually paid for a property.

Primary source data

Primary source data

Information obtained directly from field observations and survey instruments (by observing or monitoring a phenomenon or site firsthand), typically involving quantitative measurement and/or qualitative assessment of that which is observed or monitored.

Principal

Principal

The portion of a loan payment used toward reducing the original loan amount.

Property data

Property data

Property/site-specific information obtained from primary and secondary sources.

Property market

Property market

The supply and demand for ownership interests in property.

Property type

Property type

The classification of commercial real estate based on its primary use. The four primary property types are: retail, industrial, office, and multi-family residential.

Proprietary data

Proprietary data

Information obtained (usually at a cost) from private sources or firms that hold the exclusive rights to manufacture and distribute information created for specific commercial applications, supplying business, sales, and market-potential data and other information services to a targeted audience.

Purchasing power risk

Purchasing power risk

The variability in the future purchasing power of income received from an investment.

PV

PV

See present value.

Q

Qualify

Qualify

First stage of four-stage transaction management process pertaining to the process of gathering and evaluating information to measure a client's readiness, willingness, and ability to consummate a transaction. The acronym QUALIFY represents the considerations of quantify, usage, authority, latitude, intention, financial, and yield involved in the qualify stage.

Quality of life

Quality of life

The psychological and individual aspects of social well-being as perceived and experienced by people in reference to a given geographic area, which reflect a state of mind or position on the prevailing quality of existence in relation to various socio-economic and environmental conditions and/or amenities known to be associated or found within that area.

R

Range

Range

The maximum distance consumers are willing to travel to purchase a good or service from a given establishment or location. Hence, the boundary or outer limits of the market area circumscribed about a location at which a good or service may be purchased can be easily identified having knowledge of the range.

Rate of return

Rate of return

The percentage return on each dollar invested. Also known as yield.

Real estate

Real estate

See commercial real estate.

Real estate cycles (phases)

Real estate cycles (phases)

The regularly repeating sequence of economic downturns and upturns and associated changes in real estate market transactions tied to market dynamics and changing macroeconomic conditions, whose phases include (in order) recession, recovery, expansion, and oversupply.

Real estate fluctuations

Real estate fluctuations

Short-term variations in real estate prices or rents (usually lasting anywhere from one day to a few months) caused by natural hazards (such as tornadoes, hurricanes, floods, earthquakes, and wildfires) or boosts or shocks to the local economy (such as the entry or exit of major employers).

Real estate investment trust (REIT)

Real estate investment trust (REIT)

An investment vehicle in which investors purchase certificates of ownership in the trust, which in turn invests the money in real property and then distributes any profits to the investors. The trust is not subject to corporate income tax as long as it complies with the tax requirements for a REIT. Shareholders must include their share of the REIT's income in their personal tax returns. (Barron's Dictionary of Real Estate Terms and Encyclopedia of Real Estate Terms 2nd Edition, Damien Abbott)

Real estate trends

Recession

Recession

A period of reduced economic activity or a general economic downturn marked by a decline in employment, production, sales, profits, and weak economic growth that is not as severe or prolonged as a depression. As a result, sales in real estate markets are slow, property values and price levels are flat or decreasing, and there is virtually no construction of new stock given excess supply of units in most real estate markets.

Recovery

Recovery

A period of increasing economic activity or a general economic upturn, typically following a stabilization of key sectors and industries, marked by increasing sales and recovering prices in real estate markets as a direct result of an external shock (for example, a favorable tax code revision) or an increase in demand for commercial real estate which, in turn, leads to the absorption of excess space. Little or no construction occurs during the initial stages of this phase until most of the excess space is absorbed or until reasonable financing opportunities become available.

Regional center

Regional center

This center type provides general merchandise (a large percentage of which is apparel) and services in full depth and variety. Its main attractions are its anchors: traditional, mass merchant, discount department stores, or fashion specialty stores. A typical regional center is usually enclosed with an inward orientation of the stores connected by a common walkway and parking surrounds the outside perimeter.

Regulatory requirements

Regulatory requirements

In reference to land use, they are restrictions or guidelines on development or use of land, properties, or facilities as defined in accordance with design standards, building construction requirements, land use plans, occupancy codes, and zoning classifications as determined by the controlling or governing parties at the municipal or county levels.

Rent concession

Rent concession

A period of free rent given to the tenant by the lessor.

Rent escalators

Rent escalators

Items specified in a lease such as base rent, operating expenses, and taxes that may increase by predetermined amounts at stated intervals or by a constant annual percentage. Also see index lease and expense stop.

Rentable area

Rentable area

The computed area of a building as defined by the guidelines of Building Owners and Managers Association (BOMA) and typically measured in square feet, including both core/structure and useable area. The actual square foot area for which the tenant will pay rent. It is the gross area of an office building, less uninterrupted vertical space (such as stairways and elevators). Unlike useable area, rentable area includes common areas such as lobbies, restrooms, and hallways as well as the measurement of structural columns and architectural projections.

Rentable-to-useable ratio

Rentable-to-useable ratio

Defined as rentable area divided by useable area. Also known as the add-on factor or load factor. Also see efficiency percentage.

Replacement cost

Replacement cost

The estimated cost to construct, at current prices, a building with utility equivalent to the building being appraised, using modern materials and current standards, design, and layout. [Appraisal Institute].

Residential property

Residential property

Single- or multifamily housing units that are used, serve, or are designed as a place of residence.

Retail

Retail

Also see community center, fashion/specialty center, neighborhood center, outlet center, power center, regional center, superregional center, and theme/festival center.

Retail property

Retail property

Properties used exclusively to market and sell consumer goods and services.

Retail trade area

Retail trade area

Also referred to as service area, is generally defined as the geographic or formal area from which a sustained patronage is attracted to support a retail center or establishment; the extent to which is determined by numerous factors including the site characteristics of the center or establishment, its accessibility, the presence or absence of physical barriers to movement, and general limitations imposed by driving time, congestion, and distance/separation.

Reversion value

Reversion value

A lump-sum cash benefit that an investor receives or expects to receive upon the sale of an investment.

Risk

Risk

The probability that actual cash flows from an investment will vary from the forecasted cash flows.

S

Safe rate

Safe rate

The rate a low risk, liquid investment achieves.

Sale cost

Sale cost

The brokerage commissions and fees, and any additional transaction costs that are incurred during the sale of the property.

Sale(s) proceeds before tax

Sale(s) proceeds before tax

The sale price minus the sale costs and the mortgage loan balance.

Sale-leaseback

Sale-leaseback

A leasing and financing strategy in which a property owner sells its property to an investor, then leases it back. This strategy frees capital that otherwise would be frozen in equity.

Sales comparison approach

Sales comparison approach

A way to determine market value by comparing a subject property to properties with the same or similar characteristics.

Sales comparison value

Sales comparison value

An estimate of value derived by comparing the property being appraised to similar properties that have been sold recently, applying appropriate units of comparison, and making adjustments to the sales prices of the comparable based on the elements of comparison. [Appraisal Institute]

Sales per square foot

Sales per square foot

Sales revenue generated per square foot of retail floor space.

Sales potential

Sales potential

The possible or expected revenue of a retail outlet as defined by conditions within the market or trade area and the forces of competition.

Sales proceeds after tax

Sales proceeds after tax

The sale proceeds before tax minus the tax liability on the sale.

Sales volume

Sales volume

The total amount of sales/revenue generated by a retail outlet or facility in a given time period.

Securitization

Securitization

The phenomenon of indirectly investing in real estate markets in ways that minimize risk (for example, investments made collectively with pooled money or the use of investment packages/funds, such as mortgage backed securities sold on the secondary financial market) as opposed to direct investments where investors own property or hold mortgages; a long-term trend that has had significant impact on real estate values.

Sensitivity analysis

Sensitivity analysis

The process of recalculating outcomes under alternative assumptions to determine the impact of the variable under analysis.

Service area

Service area

The geographical area that encompasses/delineates the principal share of clients or customers served by the tenants of the property (a concept that becomes less applicable as the service area of the customer base increases).

Sinking fund

Sinking fund

A fund designed to accumulate a designated amount of money over a specified period of time. The periodic amount of money deposited plus compound interest will accumulate to the designated amount of money over the specified period of time.

Site analysis

Site analysis

The identification and evaluation of a site or sites to satisfy a given use or objective.

Site factors

Site factors

Site-specific factors, features, conditions, or attributes which are important in the analysis or evaluation of a location/site (including relative location, visibility, aesthetics, landscaping,condition of existing structures, regulatory mechanisms, and lot size).

Site selection

Site selection

The process of determining the best site for a specific use.

Standard deviation

Standard deviation

A measure of the amount of dispersion or variation of data points or values about the mean.The standard deviation has a very useful property in that 95.4% of the values of a data set will lie within two standard deviations (plus or minus) of the mean.

Standard Industrial Classification (SIC)

Standard Industrial Classification (SIC)

A classification scheme used for general recording purposes by government and industry to categorize and account for economic and employment activity by sector using a series of standardized and universally accepted codes.

Statistical descriptions

Statistical descriptions

Drawing a reasonable conclusion or deduction from statistical evidence based on sample statistics, while attaching a statement as to the likelihood that an assertion made about a given statistical population is true (in probabilistic terms).

Statistical population

Statistical population

The total set of elements or the collection of all individuals, items, or objects under consideration in a statistical inquiry. In short, a population is a universe comprising all members of a specified group.

Step-up lease

Step-up lease

A lease in which the rental amount paid by the lessee increases by a preset rate or set dollar amount at predetermined intervals. A step lease is a means for the lessor to hedge against inflation and future maintenance or operational expenses.

Street-based mapping

Street-based mapping

Relatively easy-to-use GIS applications that allow the user to map objects such as commercial properties or retail establishments by street address.

Sublease

Sublease

A lease in which the original tenant (lessee) sublets all or part of the leasehold interest to another tenant (known as a subtenant) while still retaining a leasehold interest in the property. Also known as a sandwich lease due to the sandwiching of the original lessee between the lessor and the subtenant.

Submarket

Submarket

A segment or portion of a larger geographic market defined and identified on the basis of one or more attributes that distinguish it from other submarkets or locations.

Substitute basis

Substitute basis

The basis in a property acquired in a qualified Section 1031 Exchange is reduced by deferred gain and becomes the substitute basis. For example, if the market value of property given up is $200,000, and the basis in that property was $75,000, then realized gain equals $125,000. Assume the market value of property acquired through a tax-deferred exchange is $350,000, then subtracting the unrecognized gain of $125,000 equals the substitute basis of $225,000. The effect of this adjustment to basis is to build in the deferred $125,000 gain into the property acquired. If the new property were sold the next day for $350,000, a $125,000 gain would be reported.

Supply

Supply

The amount of property that will be made available for sale or rent at a given price or rental rate.

Supply factors

Supply factors

Elements or forces that influence the supply of goods and services in a given market.

Supporting industries

Supporting industries

Industries that offer goods or services that are necessary as inputs in a production process or for the transportation and marketing of intermediate or finished products.

Suspended losses

Suspended losses

Passive losses that cannot be used in the current year are suspended for use in future years or at the time of sale.

Synthetic lease

Synthetic lease

A leasing and financing strategy whereby the terms of the lease under specific Financial Accounting Standard Board guidelines change the lease obligation from a capital lease (long-term lease on the company's balance sheet) to an operating lease (short-term lease on the company's balance sheet).

System

System

See dynamic system and systems analysis.

Systems analysis

Systems analysis

A methodological framework for investigating the structure, components, and functions of a system.

T

T-bar

T-bar

A chart used to summarize the timing of real estate cash flows.

Tangible characteristics

Tangible characteristics

Attributes that are quantifiable, measurable, factual, or expressed numerically as data or statistics.

Target market

Target market

Likely users or investors whose needs match the property's features. Alternatively, when representing users, the target market is the kind of property that matches your user-client's needs.

Tax impact

Tax impact

The impact of taxes on investment income and rate of return.

Tax liability

Tax liability

Real estate taxable income multiplied by the tax rate.

Tax savings (annual expense)

Tax savings (annual expense)

Entry on the tenant's Cash Flow Form. All annual expenses incurred by the tenant are tax deductible. The tax savings are calculated by multiplying the annual deduction by the tenant's tax rate.

Tax savings (capital expenditure)

Tax savings (capital expenditure)

Entry on the tenant's Cash Flow Form. It refers to any tax savings associated with any capital expenditure by the tenant in terms of the site or major, unusual business expenses incurred to make the new office efficient for the business. The amount of tax savings is calculated by multiplying the annual deduction amount by the tenant's tax rate.

Tax shelter

Tax shelter

The ability of real estate investments to reduce an investor's tax liability through the use of cost recovery.

Taxable income

Taxable income

Adjusted gross income less personal deductions and exemptions.

Taxation

Taxation

How an investment is affected by tax laws and codes.

Technical feasibility

Technical feasibility

In the case of site selection, it is an evaluation of multiple sites to determine which sites should be considered further based upon their physical limitations, regulatory requirements, and environmental and legal considerations; whereas in the case of highest and best use, it refers to the determination of the possible uses of a particular site as based upon technical considerations.

Tenant

Tenant

A person or entity who has possession of the property though a lease. A tenant also may be referred to as a lessee.

Tenant improvements

Tenant improvements

Preparation of leased premises prior to or during a tenant's occupancy, which may be paid for by either the landlord, the tenant, or both.

Tenant-paid tenant improvements (TPTI)

Tenant-paid tenant improvements (TPTI)

The total cost (outlay) of necessary tenant improvements paid by the tenant netted against any allowance provided by the landlord.

Tenure

Tenure

A designation which distinguishes between the renter versus owner-occupied status of housing units or households.

Theme/festival center

Theme/festival center

These retail centers typically employ a unifying theme that is carried out by the individual shops in their architectural design and, to an extent, in their merchandise. The biggest appeal of these centers is to tourists; restaurants and entertainment facilities can anchor them. These centers, generally located in urban areas, tend to be adapted from older,sometimes historic, buildings and can be part of mixed-use projects. [International Council of Shopping Centers (ICSC) Shopping Center Descriptions]

TI allowance from owner

TI allowance from owner

Entry on the tenant's Cash Flow Form. A specified amount of money the owner will pay for tenant improvement.

Time value of money (TVM)

Time value of money (TVM)

An economic principle recognizing that a dollar today has greater value than a dollar in the future because of its earning power.

Total effective rate

Total effective rate

The rate per square foot paid by the tenant over the entire period analyzed. Formula: Total effective rate = Total effective rent /Square footage rented.

Total effective rent

Total effective rent

The total dollar amount (cash flow) that the tenant actually will pay out over the entire period analyzed.

Total employment

Total employment

The total number of actively employed people in the workforce within a given geographic area at a particular point in time.

Total existing inventory

Total existing inventory

In reference to commercial real state, it is existing and currently available supply or stock as represented by the total number of units or total amount of space available of a specific commercial property type in a given market at a particular point in time.

Total forecast supply

Total forecast supply

Total existing inventory plus forecast planned additional inventory minus forecast planned removed inventory for a specific commercial property type in a given market area.

Total supply of commercial real estate

Total supply of commercial real estate

Refers to all existing space vacant or occupied, built, forecasted, or demolished, for a particular market area for a specific period of time.

TPTI

TPTI

See tenant-paid tenant improvements.

Trade area

Trade area

An area delineated about a central or dominant location, comprising a zone that is dependent upon production output from that location to meet internal demand, whose outermost boundaries are defined in terms of the presence or absence of interactions with that central or dominant location (for example, a localized area over which some specific activity or transaction takes place). Note that in central place theory context, the terms trade area and range are used interchangeably. Also see range.

Transaction management process

Transaction management process

A continuous, cyclical four-stage process in which a transaction manager is involved with qualifying, matching, closing, and adding value for clients. Also see qualify, match, close, and add value.

Transfer income

Transfer income

Money that is transferred to a local economy from outside sources without the exchange of any good or service (including social security, welfare and retirement benefits, interest dividends and rent on investments).

V

Vacancy

Vacancy

The number of units or space (of a specific commercial type) that are vacant and available for occupancy at a particular point in time within a given market (usually expressed as a vacancy rate).

Vacancy allowance

Vacancy allowance

A desirable level of vacancy that is known to facilitate transactions and turnover in a housing market (for example, a vacancy rate that allows the market to operate smoothly and efficiently by enhancing household mobility); an index used for estimating housing demand.

Vacancy rate

Vacancy rate

The percentage of the total supply of units or space of a specific commercial type that is vacant and available for occupancy at a particular point in time within a given market.

Variable expenses

Variable expenses

Costs, such as utilities, that vary with a building's occupancy rate.

W

Weighted average cost of capital (WACC)

Weighted average cost of capital (WACC)

The average cost of capital (whether equity or debt), taking into account the relative proportions of each source of capital. (Encyclopedia of Real Estate Terms 2nd Edition, Damien Abbott)

Y

Yield

Yield

A measure of investment performance that gauges the percentage return on each dollar invested. Also known as rate of return.

Z

Zoning

Zoning

The designation of specific areas by a local planning authority within a given jurisdiction for the purpose of legally defining land use or land use categories.